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Grown-up children are increasingly pressuring their parents to take money out of their home to finance their own house buying, advisers have warned.
The number of mortgages being taken out in later life has been growing, as homeowners work past typical retirement ages and want to free up capital to fund the Bank of Mum and Dad.
In the last three months of 2024, 35,840 mortgages were given to older borrowers, with a total value of £5.6bn, up by nearly 40pc on the same period the year before.
More than 5,700 lifetime mortgages – a type of equity release – were taken out in 2024, up by 6.7pc on the year before. The value of the lending was up by a quarter, to £510m, according to figures from industry body UK Finance.
But advisers have warned of a disturbing rise in family members pushing their elderly relatives into releasing funds – even when it harms them financially.
In one case, a son in his late forties is said to have looked to finance his own property purchase by releasing money from his mother’s home.
The adviser involved, Iain Swatton, of Exemplar Financial Services, said: “Unable to obtain a mortgage himself, he pressured his mother. It was only when other family members intervened that she decided against it.”
Mr Swatton has before seen other similar cases: “Another situation involved a son in his late thirties who wanted to fund a new business venture by using the equity in his mother’s home.
“He was pressuring her to release a significant sum, justifying it by claiming his bank had declined a loan and he was merely requesting his inheritance in advance.”
Mr Swatton said that it was often in cases where individuals couldn’t secure loans on their own where he saw the most pressure applied.
He said: “This sense of entitlement to access their anticipated inheritance prematurely can lead to undue emotional pressure and coercion on elderly parents. While this issue isn’t entirely new, it appears to be becoming more prevalent in the current economic climate.”
Another adviser, Ben Perks, of Orchard Financial Advisers, said he rejected a case where he felt that an adult son was pressuring his parents.
He said: “I have walked away from a case. After conversations with the parents and children, it became clear that all parties other than the son were uncomfortable.
“The son was the only one set to gain financially through this transaction and I expressed my discomfort and advised against proceeding.”
Mr Perks said: “In desperation to improve their circumstances, cash-strapped children are pulling at the heart strings of their equity-rich parents.”
Rachel Reeves’ inheritance tax raid on pensions could encourage more pensioners to take equity from their properties, in order to pass on money before their deaths, experts said.
An extra 153,000 estates are expected to be caught out by the levy being expanded to pensions by 2030, according to data obtained from the Office for Budget Responsibility by platform Interactive Investor.
But anything gifted more than seven years before death is not subject to inheritance tax, and regular gifts made of excess income are also exempt.
But Jamie Elvin, of Strive Mortgages, said: “While supporting loved ones is natural, parents shouldn’t feel like an ATM for their kids’ money worries.
“If pressure is creeping in, there should be a clear way to flag concerns – because a lifetime mortgage shouldn’t come with a guilt trip.”
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